Finance Ministry replies Dr Bawumia on whereabouts of $1bn Eurobond

The Finance Ministry says it is using some $1 billion proceeds from a Eurobond sale in September judiciously, contrary to allegations the money has been used to pay debts incurred by the central bank.

The Finance Ministry’s decision to make public how the over-subscribed Eurobond fund has been expended is in response to Dr Mahamoud Bawumia’s assertions that the Finance Ministry has been cushioning the weak cedi artificially.

The man who will be vice presidential candidate of the New Patriotic Party (NPP) in 2016 had said the reason the $1 billion Eurobond was not mentioned in the 2015 Budget statement was because it had not been used for the intended purposes, challenging the ministry to publish a full list of projects executed with the money.

Speaking in the UK, Dr. Bawumia, who is a former Governor of the Bank of Ghana, claimed the money had been signficantly wasted in shoring up the cedi that has fallen against major international currencies.

In a sharp rebuttal Deputy Finance Minister, Cassiel Ato Forson, said to Dr Bawumia’s allegations were unfounded.

According to him the money from the Eurobond sale is being used judiciously, adding not all the $1 billion have even been expended on earmarked projects.

“What we said is that we are going to use $250 million for capital expenditure, and to take another $300 million for counterpart and matching funds and also to use $200 million for maturing short time debts”, said Ato Forson.

He said at the appropriate time Parliament will be briefed fully on how all the funds have been used.

In a related development, Head of Economic Department, University of Ghana, Legon, Professor Peter Quartey, has also been expressing concern about the growing public debt which has now hit a worrisome threshold of 60.8 percent of GDP.

That places the country in the category of a Highly Indebted Poor Country (HIPC).

But Ato Forson says a large chunk of the debt is owed by independent state agencies.

He maintains the economy is still in good shape.

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